1. If you had to give Monroe one piece of advice as he sits down to draft his proposal to Jim, what would you say?
I would tell him that because Jim is setting the tone for him to negotiate a salary for both, he should choose a midpoint. Since Jim is willing to teach him skills that will help him for the rest of his life, and these opportunities are not they are so easily most companies require experience for their new hires.
2. If you were Monroe, what offer would you propose to Jim? Please specify the terms:
(1) Base Salary: $100,000 per year paid semi-monthly.
Since Whole Health Management is a mid-cap company and you want to pay for a competitive package at Harvard Business School, it is best to choose the average base salary of the health sector form Exhibit 6 of $ 100,000 per biweekly paid a year. Also, since the CEO, Jim Hummer is a willing mentor and offers many challenging opportunities to Munroe, he may not get anywhere else, so he would be willing to commit to the monetary benefits.
(2) Performance-based bonus: $30,000, based on agreed upon goals.
Since the median total additional compensation is given in Exhibit 6 is 30% of the median base salary. With a 30% decrease in Munroe’s salary, he could maintain his standard of living in Cleveland as it is a less expensive city as compared to Boston.
(3) Stock Options: Options to purchase 10,000 shares at $2.7 per share according to vesting schedule.
It is the standard equity plan for incoming executives. Also, Jim mentioned that the company might grow 3 folds by year end 2006. Therefore, Munroe would want to invest in the firm’s equity, and Jim also mentioned that the organic growth strategy may generate many opportunities for Munroe, being in a leadership role he would like to have more stake in the company.
(4) Other terms: continue education stipend 70% of tuition fees for farther educations if approved dues and licensures. Sponsor 100%the certifications and other dues and licensures in the future.